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May 12, 2009

As some had recently predicted, AT&T and Verizon Wireless are now swapping some assets after U.S. government regulators require that they divest properties related to each companies’ respective acquisitions of Centennial Communications.

Overall, AT&T will pay about $2.35 billion in cash for Verizon Wireless' assets covering a little over 1.48 million subscribers in eighteen states, primarily in rural areas.

The transaction has not yet been approved by the government or the FCC but is expected to close in the fourth quarter of 2009.

Verizon was required to divest 2.1 million wireless subscribers in 22 states as well as spectrum and business management assets as a result of regulatory approvals related to its $28 billion acquisition of Alltel earlier in January.

AT&T will have to convert the Verizon assets from CDMA to GSM technology, however.

The undertaking is expected to take about a year and cost AT&T about $400 million.

Verizon Wireless will then buy AT&T assets in 2014 covering about 120,000 subscribers for $240 million as a result of U.S. government approvals related to AT&T’s purchase of Centennial Communications in November 2008.

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    This article was featured on Business 5.0 and on Tech Blog.

Source: Verizon Wireless.